The financial fallout from the festive sales season

THE CRUCIAL retail Christmas reporting period kicks off with updates from major high street giants this week.

The warm December meant that retailers had mixed fortunes over the festive period

Department chain John Lewis has posted strong weekly figures in the festive period, which is expected to translate into a robust Christmas update on Wednesday.

The employee-owned firm, which runs 46 stores, said its Christmas sales got off to a good start when it launched online on Christmas Eve at 5pm, and saw a 17.7 per cent increase in revenues in the first hour, compared with the first 60 minutes a year ago.

The firm also reported positive sales in the final full week before Christmas, bucking the trend of high street retailers that have suffered from mild weather and early discounting. It posted revenues up 7 per cent to £171.8million in the week to December 19, compared to a year ago.

GETTY

John Lewis posted strong weekly figures in the festive period

GETTY

Next's takings were hurt by an unusually warm winter

Meanwhile, Next is expected to see the warmest December in 100 years trim its Christmas profits when it updates on trading tomorrow. Analysts at Jefferies have cut their fourth-quarter sales growth for the group to 4 per cent compared to a year ago from earlier estimates of 7.6 per cent, amid a number of high street chains beginning sales early.

However, Next has a reputation for always starting its sales after Christmas in order to protect full-price revenues. It also has a supply chain known for being able to flexibly handle changes in weather. In October, the group edged up its full-year guidance to between £810million and £845million, from an earlier range of between £805million and £845million.

GETTY

Marks and Spencer's food arm posted strong figures

For Marks & Spencer, trading figures are slightly less positive. The retailer is not expected to see an improvement at its embattled clothing division when reporting Christmas figures on ­Thursday, as it continues to cut back on discounting.

The City expects third-quarter like-for-like sales at its general merchandise arm, which includes womenswear, to fall by about 2 per cent, following a 1.9 per cent drop in the previous three months.

However, the high street store is expected to turn in another decent performance in its food division, with flat like-for-like sales. This year the City expects Marks & Spencer to boost annual pre-tax profits by 3.6 per cent to £685million.